PinPane Limited
Computer Assembler
Chapter I• Company Profile
PinPane is a company based in Germany, found by Andreas Lahm in the year of 2000. The
company has a total number of employees of 680 and its headquarters are situated in Dortmund.
PinPane has one subsidiary, which currently operates in Switzerland. It operates on the IT
market and provides a various range of IT products. The company products offered are the
following:
I.01 Touch Screen Notebooks
With an internal 260GB hard drive, the TS-10001 series touch screen sensitive notebooks are
classified under the product code name "one spin.".
The TS-1000 Specifics are the following:
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1
CPU: 2.2 Ghz AMD Core 2 Duo processor pre-bundled with PinPane LongRun Power
Manager (doubling battery usage time)
Display: 13.3” LCD Screen WSXGA+ (1680x1050) wide-format with embedded touch
screen
Operational Memory: 3GB 1066MHz DDR3 memory, SDRAM; two SO-DIMM slots
support up to 4GB
Disk Hard Drive: 260GB Serial ATA hard drive, 7000 rpm
Graphic Adapter: NVIDIA GeForce 9400M graphics processor 256MB DDR3 SDRAM
Slot-loading optical drive: 8x SuperDrive (DVD±R DL/DVD±RW/CD-RW)
Video: Built-in iSight camera; Mini DisplayPort output port with support for DVI, VGA,
and dual-link DVI
USB: 4 USB 2.0 ports (up to 480 Mbps)
Built-in Wireless LAN (802.11b)
L2 cache: 3MB shared
Quick Point pointing device and stylus
Operating system: Microsoft Windows Vista, Ubuntu Linux (dual boot)
Embedded Bluetooth adapter
Size and weight :
o Height:0.95 inch (2.41 cm)
o Width:12.78 inches (32.5 cm)
o Depth:8.94 inches (22.7 cm)
o Weight:4.5 pounds (2.04 kg)
TS stands for Touch Screen (Technology)
I.02 Portable hardware, including USB, Floppy, Mice, PC tablets
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The PP tx2500z tablet features an AMD Turion 64 X2 Dual-Core Mobile Technology
processor, up to 4GB DDR2 system memory, ATI Mobile Radeon HD 3200 integrated
graphics and a 12.1" WXGA touchscreen/active digitizer display.
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ThinkPad Secure Portable hard drive with 128-bit hardware encryption (available in
160GB and 320GB)
o Weight: 0.69lbs
o Dimensions: 3.5 inch x 4.8 inch x 0.9inch (width x depth x thickness)
USB 2.0 Hubs (measures 3.5" x 1.75" x 0.75" and weighs a feather-light 1.8 ounces)
Supplementary USB power cable
External floppy disk
Neoprene travel case with storage pocket for cables
USB slippers
Optical mouse
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I.03 Technology supported:
We have for years supported both Windows and Linux technology for CPUs, although we've
switched vendors many times for the Windows (and previously DOS) lines. We are also
supporting Novell, Banyon, and Microsoft networking, Xbase database software, and Claris
application products.
I.04 Ranking and market share
PinPane Co. is in the top five producers and retailers of IT services on the Swiss and German
market. The market share reached for the last two periods is 18%.
I.05 Organizational Hierarchy
1. Description
Contact Person
CEO
Adreas Lahm
2. Description
Contact Person
Chief Operating Officer
Timothy Boil
3. Description
Contact Person
Senior Vice President, General Counsel and Secretary
Tim Hadwig
4. Description
Contact Person
Software Innovations
Alexander Smith
5. Description
Contact Person
Senior Vice President, Industrial Design
Nick Lassen
6. Description
Contact Person
Senior Vice President, Retail
David Mumberg
7. Description
Contact Person
Vice President, Hardware Engineering
Tina Misberg
8. Description
Contact Person
Senior Vice President and Chief Financial Officer
Antoan Clamaran
9. Description
Contact Person
Senior Vice President, Worldwide Product Marketing
Mari-Ann Kruff
10. Description
Contact Person
Senior Vice President, Software Engineering
David Clinsman
11. Description
Contact Person
Senior Vice President, Applications
Michael Stoven
I.06 Company Administration
 Human Resources and Quality Management Department
Contact Person
Pavel Antonov
 Logistics Department
Contact Person
Georgi Georgiev
 Marketing Department
Contact Person
Alexander Smogorzhevsky
 Legal Advisor
Contact Person
Ina Rasheva
 Financial Department
Contact Person
Pavlina Rangelova
 Research and Development
Contact Person
Alexander Smith
 Production Department
Contact Person
Allan Gregory
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Plant Manager
I.07 Organizational Chart
Chris Helbig
Ceo
Adreas Lahm
Legal Advicer
Ina Rasheva
Hardware and
Engineering
Tina Misberg
Research and
Development
Alexander Smith
Marketing
Department
A.Smogozhevsky
Software innovation
A.Smith
Industrial Design
Nick Lassen
Human Resources
And Quality
Department
Pavel Antonov
Product Worldwide
Marketing
Mari Ann Kruff
General Counsel
and Secretary
Tim Hadwig
Logistics
Department
G.Georgiev
Financial
Department
Antoine Clamaron
Senior Financial
Assistant
Pavlina Rangelova
Marketing
Application
Michael Stoven
Plant Manager
Chris Helbig
Production
Department
Allan Gregory
I.08 Quality of products
When we are talking about quality we have to know that the word by itself means a lot of things.
Quality means:
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Low weight.
Stable software systems Better design.
The software is user friendly Reasonable price.( only 16% higher than other laptops)
All users can collaborate with each other.
Also have a combination of listening, talking, making photos and surfing the webCompact
with a lot of storing space
I.09 Core Values, Mission and Vision of PinPane Co
(a) Vision
We are committed to supply the market we serve with advanced technology and outstanding
quality of products and services by being innovative and socially responsible organization.
(b) Mission
We are committed to bring the gap between man and machine away, through a constant
innovation and pushing the world ahead, we change the industry standards.
(c) Slogan
The Unimaginable is doable
(d) Company Values
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Innovative design
Teamwork
Shared Responsibility
Reliability
Creativity
Continuous Improvement
(e) Goals of the company:
The company aims at entering a foreign market and strengthen the customer awareness of the
company brand on the new market by achieving 3% market share by the end of the first year.
Chapter II• Country Screening
II.01 Criteria
PinPane has a stable position on 2 markets where it operates nowadays. It is Germany and
Switzerland. On the meeting of board the decision of expansion to European country was taken.
The countries were selected on the basis of certain criteria, which are economical environment,
logistics aspects, technological level and IT industry attractiveness. On the basis of these criteria
three countries were selected and a decision matrix was created for them and they were ranked.
The three countries, which are compared, are Denmark, United Kingdom and the Netherlands.
The criteria are:
1. Economic environment
This factor describes overall economical situation within each country. These include
state of the economy, main trends, GDP per capita and rate of taxation. Also the financial
crisis is going on nowadays and it is vital to mention how it influenced the economical
situation in countries that are examined for expansion. The state of economy and well
being of customers are directly related to amount of sales. The weighting factor of 20% is
given.
2. Technology level
This factor provides information about the overall technology level in examined
countries. These include main trends, market potential and amount of people that use
internet and IT technologies. The weighting factor of 10% is given.
3. Attitude towards technology
This factor is related to cultural aspect how people are interested in IT technologies and
recent innovations in this field. This factor is important, because PinPane’s target group
is a people who are interested in innovations and recent development in this sector. The
weighting factor of 25% is given.
4. Logistics
As PinPane’s production still remains in Dortmund, the logistics factor becomes
important. It includes proximity of selected countries to Dortmund and possible costs of
services of logistics companies, which we will use to distribute our production. The
weighting factor of 15% is given.
5. Industry attractiveness
This is the last but not the least factor, on basis of which we compare selected countries.
Industry attractiveness includes such vital factors as competitiveness rivalry on the IT
market of specific country. Also it describes potential market niche for our company. The
weighting factor of 30% is given.
II.02 Quick Scan of the Netherlands
(a) Economic environment
The Netherlands has a prosperous and open economy, which depends heavily on foreign
trade. The economy is noted for stable industrial relations, fairly low unemployment and
inflation, a sizable current account surplus, and an important role as a European
transportation hub. Industrial activity is predominantly in food processing, chemicals,
petroleum refining, and electrical machinery. A highly mechanized agricultural sector
employs no more than 2% of the labor force but provides large surpluses for the foodprocessing industry and for exports. The Netherlands, along with 11 of its EU partners,
began circulating the euro currency on 1 January 2002. The country is one of the leading
European nations for attracting foreign direct investment.
The stern financial policy has been abandoned in 2009 on account of the current credit
crises. The relatively large banking sector was partly nationalized and bailed out through
government interventions. Large unemployment, double the current rate of 4% is expected
since the Netherlands is an open economy. A large deficit in government accounts of 5% is
expected for 2009. The government wants to stimulate the economy by accelerating already
planned projects. Fundamental reforms for long term recovery will be implemented as well.
The GDP per capita is 31,434 in year 2008.2
Taxation of wage income tax in the Netherlands (Average personal income tax and social
security contribution rates on gross labor income).3
Tax
% AW
66 %
100 %
133 %
166 %
Central income tax
4,7%
14,0%
20,9%
27,1%
Sub-central income tax
0,0%
0,0%
0,0%
0,0%
Total income tax
4,7%
14,0%
20,9%
27,1%
26,0%
21,4%
16,5%
13,2%
30,7%
35,4%
37,4%
40,3%
15,9%
15,4%
12,8%
10,2%
40,2%
44,0%
44,5%
45,8%
Employee
social
health insurance
and
´All-in´
Employer
social
health insurance
Taxation total
2
3
and
http://tinyurl.com/cw6s75
http://www.cfe-eutax.org/taxation/income-taxes/netherlands
(b) Technological Level
In the second quarter of 2008 turnover in the IT sector was 1.1 percent up on last year’s
second quarter. For nine months in a row turnover is distinctly better than in 2004 and
2005. The downward trend in turnover in this sector has now been reversed.
The Netherlands is highly technologically developed country. The percent of people than use
Internet is 82.9 % (13,791,800 people).4
(c) Attitude towards technology
The Dutch have a positive attitude towards science and technology and hold scientists in
high esteem. The population's ideas on the meaning of the concept of science, however, are
fairly vague. These were among the main findings of the survey "The image of science"
carried out by the Social and Cultural Planning Office of the Netherlands (SCP).
The Dutch population considers science as trustworthy and prestigious. Although the public
perceives some risks, there is a marked optimism about the power of science to solve today's
problems. Compared to 1985, the overall attitude towards technological innovations is more
positive. However, there are ambiguities according to the type of innovation. While the
Internet or emails are held in high esteem, there are still objections to genetically modified
food, nuclear energy and military technology.
We should note also an interesting fact that Philips, nowadays a leader in innovations in IT
industry, is a Dutch based company.
(d) Logistics
Speaking about Logistics expenses and distances we should note that the Netherland is the
closest country to PinPane’s factory in Dortmund. The distance between Dortmund and
Dutch-German border is 100 km. The distance between Dortmund and biggest cities in the
Netherlands are:
 Dortmund-Utrecht 205 km
 Dortmund-Amsterdam 241 km
 Dortmund-Den Haag 258 km
 Dortmund-Rotterdam 254 km
So the average distance between Dortmund and main cities in the Netherlands is 230 km and
such proximity sufficiently decreases costs involved in Logistics.
(e) Industry Attractiveness
The Dutch IT market we can characterize as highly competitive. As a country with open and
highly developed economy and high technological level, the Netherlands is country where
customers can find products from almost all IT companies worldwide. So that makes the
competitive rivalry is extremely high. Nevertheless we should note that Dutch IT market is quite
attractive for expansion for PinPane because of general attitude towards technology in the
4
http://www.internetworldstats.com/stats9.htm#eu
Netherlands. And people, who are interested in innovations, are our main target group of
customers
II.03 Quick Scan of United Kingdom
(a) Economic Environment
Latest National Accounts data confirms the preliminary view published last month that the
UK economy has entered recession, and that the pace of the downturn has accelerated. In the
final quarter of 2008 Gross Domestic Product fell by 1.5 per cent, driven by large output
declines in the manufacturing and distribution, hotels and catering industries. New data on
the expenditure side of the economy shows that household consumption and fi xed
investment have contracted sharply, but the most signifi cant contribution to falling demand
has come from falling inventories as fi rms prefer to meet demand by running down stocks
rather than through production. Strong and rapid pass-through from falling output to the
labour market has continued, with further rises in redundancies pushing up the
unemployment rate to 6.3 per cent. Consumer prices inflation remains above target at 3 per
cent, but is expected to fall sharply during this year.
2003
2004
2005
2006
2007
2008
Intermediate taxes
Commercial
industrial rates
and
Employers'
contributions
NI
191
232
277
311
397
282
319
386
462
520
663
470
Duty on hydrocarbon oils 129
156
186
210
268
190
Vehicle excise duty
27
32
39
43
55
39
Other
172
208
249
280
357
253
Total indirect taxes
3
357
4 393
5 274
5 974
7 350
5 270
Post-tax income
7
127
14 399
19 508
25 997
46 227
22 651
Education
3
624
3 013
2 214
1 632
1 057
2 308
National health service
2
389
2 535
2 462
2 253
2 009
2 330
Housing subsidy
115
53
32
12
3
43
Rail travel subsidy
26
30
42
61
105
53
Bus travel subsidy
43
45
45
49
42
45
109
38
12
6
2
33
6
305
5 715
4 809
4 011
3 218
4 812
13
432
20 114
24 317
30 008
49 444
27 463
Benefits in kind
School
welfare milk
meals
and
Total
Final income
1 Including pension credit
2 Child tax credit and working tax credit payments
which are treated as benefits (see Appendix 2,
paragraph 22).
3 Child tax credit and working tax credit payments which are treated as
negative income tax. Also includes tax relief at source on life assurance
premiums.
4 Council tax and Northern
Ireland rates after deducting
discounts.
The following table examines the scope of the average income, taxes and benefits of the
British households. It could be concluded, that the economic turbulence has its effect on the
income of the British citizens. The declined in the income comparing 2008 with 2007 is
almost double.
The tendency is to reduce expenses for goods and services that are not considered to be of a
great importance to the households. The decline in the Internet and IT services sales is a
proof that the British citizens are not willing to cover costs related to this industry.
(b) Technological Level
Despite of the unfavorable economic climate there are other sectors which recorded positive
growth in the three months to December 2008. These are the IT, financial intermediation
and real estate industries. The first of these performed especially well, growing by 2 per cent
during the quarter according to the British national Statistical Database.
However, the overall performance of this sector is in its decline if it is compared to previous
years. The table presented above follows the peak of its development in the years 20032004. The decrease in the performance is an outcome of the severe economy crisis which
causes turbulence in a number of sectors in the United Kingdom. The per cent of people that
use PCs is 76 people out of 100.
(c) Attitudes towards Technology
The British Government has spent over 1.5 billion pounds in the sphere of IT communications
development over the past 5 years according to a research carried out by the National British
Statistical Institute. However, the attitude of the majority of the British society is relatively weak
in the means of introducing new Hi-Tec products on the market, including new generation
notebooks and software.
(d) Logistics
There is a well built logistic system between Germany and Great Britain. The routes and the
distribution channels consist mainly of railway systems. There are several companies that
provide logistics services on high level supported by telecommunications hosting and
performed 24/7. However, the calculation of the costs prove that maintaining the channels
available for import, export and distribution will be on a level on which our company cannot
afford it. The analysis of the logistic system prove that Great Britain will be expensive
market when it comes to distributing the products of the company.
(e) Market attractiveness
The market could be described as attractive when it comes to rivalry with other companies.
The two major operating companies in Great Britain are Lenovo and Acer, which have
subsidiaries in the country. Lenovo operates on the market with the strategy of being low
cost leader, while Acer applies differentiation strategy.
II.03 Quick Scan of Denmark
(a) Economic Environment
After a long consumption-driven upswing, Denmark's economy began slowing in early 2007
with the end of a housing boom. This cyclical slowdown has been exacerbated by the global
financial crisis through increased borrowing costs and lower export demand, consumer
confidence, and investment. This thoroughly modern market economy features high-tech
agriculture, up-to-date small-scale and corporate industry, extensive government welfare
measures, comfortable living standards, a stable currency, and high dependence on foreign
trade. Unemployment is low and capacity constraints are limiting growth potential. Denmark
is a net exporter of food and energy and enjoys a comfortable balance of payments surplus.
The government has been successful in meeting, and even exceeding, the economic
convergence criteria for participating in the third phase (a common European currency) of
the European Economic and Monetary Union (EMU), but so far Denmark has decided not to
join 15 other EU members in the euro. Nonetheless, the Danish crone remains pegged to the
euro. Denmark's fiscal position is among the strongest in the EU. Economic growth gained
momentum in 2004 and the upturn continued through 2006. A slowing global economy cut
growth to 0.3% in 2008. Because of high GDP per capita, welfare benefits, a low Gini index,
and political stability, the Danish living standards are among the highest in the world. A
major long-term issue will be the sharp decline in the ratio of workers to retirees. The GDP
per capita is 30,150 euro (est. 2008) and the unemployment rate is 2%. There are now more
unemployed men than women. Inflation fell from 1.9% in 2006 to 1.7% in 2007 and was
3.6% in 2008. Average annual growth rates were less than 2% in 2007.
A flat tax rate of 28% is imposed on the income of a corporation. Business-related expenses,
depreciation and interest payments are deductible from the gross income. No local taxes are
levied on corporate income.
(b) Technological Development
Denmark's 2008 budget plan has set aside 4 billion Danish kroner (about 732 million U.S.
dollars) for research and development at the country's public facilities in an effort to keep
Denmark at the top of the globalization wave, said reports reaching here Wednesday. The
plan doubles R&D funding from 2007 and has set a goal of a full 1 percent of GNP to be used
in the field by 2010. The funding comes after last year's broad political agreement to create a
globalization strategy. Objectives such as increasing capacity, improving education, and
increasing global marketing are included in the plan, which has been given the nod of
approval from the Confederation of Danish Industries (DI), the Copenhagen Post reported.
As we can see the tables shown in the appendix, Denmark is on 9th place for people having
personal computers in the world and on 6th place for capacity of innovations. According to
the World Economic Forum the firm level technology is aggressive in absorbing new
technology. The percent of people that use PCs is 69%.
The Danish ICT sector is structured towards a service market rather than a production
market. A new market analysis of the IT sector by the Danish IT Trade Association predicts
even better times ahead with increased orders, growing production and new jobs as a final
proof that the industry is coming out of its slump.
(c) Attitudes towards Technology
Denmark is a highly computerized society with a large and steady demand for state-of-the
art software and IT products. Recent high technologies are introduced in almost all
industries, but at the same time people’s general attitude towards technology still remains
quite moderate.
(d) Logistics
Denmark is a country which is geographically situated in few peninsulas and islands and that
make our possible logistics expenses higher. Denmark and Germany have the common
border, the distance between capital of Denmark Copenhagen and Dortmund is 670 km.
(e) Market Attractiveness
Denmark is a part of European Union and country with an open economy and that makes IT
market saturated with a high competitive rivalry. As a country with relatively moderate
number of PSs users (69%) compared to other European countries, we can conclude that IT
market of Denmark has comparatively low attractiveness to our company.
(f)
II.03 Decision Matrix
Aspect
Denmark
The
Netherlands
United
Kingdom
Weighting
factor
Economic
environment
3
4
4
20%
Technology level
4
5
4
10%
Attitude towards 4
technology
5
3
25%
Logistics
3
5
3
15%
Industry
attractiveness
3
4
3
30%
Total Score
17
23
17
100%
4,5
3,3
Final Weighted 3,35
Score
*Grades are from 1 to 5
1-the lowest, 5-the highest. Based on this matrix we can conclude that the best option for
expansion is the Netherlands with overall score of 4.5 out of 5.
Chapter III• External Analysis
III.01 D-STEP Analysis
(a) Social factor
The two official languages are Dutch and Frisian. English is also widely known as a second or
third language. The people are mainly highly educated. Because the Netherlands is such a small
and densely populated country, this makes distribution channels easy because of the proximity
between major ports and cities.
(b) Technological factors
Speaking about technological level in the Netherlands,we can conclude that its very high.
Eighty eight people out of one hundred have notebooks. There are several big companies
operating in the field of electronics. The largest one and the most famous is Philips. Also we
can see application of high technologies in many spheres of people’s life and that is why we
can expect demand for production of PinPane.
(c) Economic factors
The Netherlands is a highly industrialized country with a very strong currency which has
performed nicely. The Netherlands has a prosperous and open economy, which depends
heavily on foreign trade. The economy is noted for stable industrial relations, moderate
unemployment and inflation, and an important role as a European transportation hub. The
Netherlands, along with 11 of its EU partners, began circulating the euro on January 1, 2002.
The country continues to be one of the leading European nations for attracting foreign direct
investment and is one of the five largest investors in the US. The economy experienced a
slowdown in 2005 but in 2006 recovered to the fastest pace in six years on the back of
increased exports and strong investment. The pace of job growth reached 10-year highs in
2007. 591.3 billion euros GDP, which has a 3.5% real growth rate. Per capita GDP is 30,000
euros. There are 7.604 million in the labor force and 76% are in services, 21% are in
industry, and 3% are in agriculture. The unemployment rate is 4.6%. Public debt is 45.5%
of the GDP and here is a 1.2% inflation rate. As of December 31, 2007 the commercial bank
prime lending rate was 8.72%. The chief industries are agro-industries, metal and
engineering products, electrical machinery and equipment, chemicals, petroleum,
construction, microelectronics. The Netherlands export 361.3 billion euros in goods and
imports 312.5 billion euros. The Netherlands primarily exports to Germany 24.4%, Belgium
13.6%, and the UK 9.1% and primarily imports from Germany 17.7%, China 10.5%, and
Belgium 9.3%.
(d) Political factors
The conventional long name is the Kingdom of the Netherlands, but an easier, conventional
short name exists as well, the Netherlands. The type of government is a constitutional
monarchy. The capital city is Amsterdam, although most of the government buildings are
located in The Hague. The Netherlands has two Dependent areas Aruba, and Netherland
Antilles located in the Caribbean. There is a bicameral legislation. Supreme Court or Hoge
Raad. Political pressure groups include, but aren’t limited to, Christian Trade Union
Federation, Confederation of Netherlands Industry and Employers, Netherlands Trade Union
Federation, etc.
(e) Taxation
Consequently, the Dutch tax system has many features that make the Netherlands an
attractive location for businesses operating on an international scale. Examples include the
tax treatment of business profits, the participation exemption, the absence of withholding
taxes (except for dividend tax) and the large number of tax conventions to which the
Netherlands is a signatory. The Dutch Tax Department has ensured that it is very accessible,
and it takes a client-oriented approach. Recent international studies have confirmed that the
Netherlands scores well as an investment location.
In order to stimulate the economy and employment opportunity, the basic rates of taxation
are lowered. Work is made more attractive by the introduction of an ‘employment rebate’:
those people in paid employment enjoy a tax advantage in the form of a fixed non-taxable
deduction.
The reduction in taxation on labour is financed by reductions in expenditure and by
increases in indirect taxes, such as vat and environmental levies.
By lowering the taxation on income from employment, together with a shift from direct to
indirect taxation, the Netherlands’ economic structure and its international competitive edge
will be strengthened. Greater emphasis on environmental levies will make a significant
contribution towards achieving sustainable economic development.
(f) Conclusion
After careful analysis of business opportunities in the Netherlands we can conclude that the
Dutch market of IT technologies is attractive for expansion. The Netherlands is a highly
industrialized country and a member of European Union.More than that the Netherlands and
Germany (where our headquarter and factory are situated) have common border and that
will ease the procedure of expansion and it will minimize costs of logistics. Dutch people are
mainly highly-educated and the percent of people that have notebooks is one of the biggest
in Europe. Per capita GDP is $39,000. Based on the this research we believe that the
Netherlands is the best country for expansion of PinPane.
III.02 Industry Definition
ICT (information and communications technology - or technologies) is an umbrella term that
includes any communication device or application, encompassing: radio, television, cellular
phones, computer and network hardware and software, satellite systems and other
technological tools or devices, as well as the various services and applications associated with
them, such as videoconferencing and distance learning facilities. ICTs are often spoken of in a
particular context, such as ICTs in education, health care, or libraries.
According to the European Commission, the importance of ICTs lies less in the technology itself
than in its ability to create greater access to information and communication in the ever
increasing demand for better services quality. Many countries around the world have established
organizations for the promotion of ICTs, because it is feared that unless less technologically
advanced areas have a chance to catch up, the increasing technological advances in developed
nations will only serve to exacerbate the already-existing economic gap between technologically
developed and undeveloped areas. Internationally, the United Nations actively promotes ICTs for
Development (ICT4D) as a means of bridging the digital divide worldwide. All low-, medium-range
and high-end portable and non-portable personal computer systems, designed to be operated by a
single user at a time. Includes both business and residential use. Nowadays the industry's
manufacturers activities are quite broad. The industry has a tendency to constantly extend it's size
constantly bringing revolutionary products which rapidly change the industry outlook.
Technology spending may be softening in many parts of the world as the credit crunch bites, but
the
longer term fundamentals of IT industry competitiveness remain constant. An innovationfriendly
culture, a steady flow of talent, advanced technology infrastructure, a robust legal regime, well
balanced government support and an open business environment are all vital factors that enable
a
country's IT producers to thrive. These form the basis of the Economist Intelligence Unit's "IT
industry
competitiveness index", in which the United States ranks as first in the world in 2008,
maintaining its
top position from the previous year.
As an incubator of high-tech start-ups and technology innovation and as a developer of talent,
the US
remains second to none. However, there is no room for self-esteem, as three new countries—
Taiwan, Sweden and Denmark—move into the top five for year 2008, displacing others such as
Japan and South Korea. IT industry environments elsewhere in Europe and Asia, including in
emerging markets, are also becoming more competitive.
In this report we use an IT industry index competitiveness. The index is built for a second year in
2008 and includes 66 countries. The category and indicator weights were formulated by the
Economist Intelligence Unit's modeling team using, as a guide, individual correlation coefficients
of many different IT industry indicators. The prepared index contains overall index score and
category scores for each country.
The index results are highlighted in a new report, How technology sectors grow: Benchmarking
IT
industry competitiveness 2008, written by the Economist Intelligence Unit and sponsored by the
Business Software Alliance (BSA). Following are the major conclusions of the research, and the
key
implications of the index for governments and IT industry leaders:
(a) Investing in people is mission-critical. Sourcing talent will be among the toughest
challenges IT producers will face in the coming years. The US, Singapore and UK provide the
best environments for human-capital development among the index countries. The brain drain
of IT talent from emerging markets shows signs of slowing or reversing, however, and the US
and other leaders will need to work hard to remain magnets for the world's IT talent.
East Asia boasts the strongest R&D environments. Dynamic innovation, supported by a
strong R&D environment, is a major contributor to IT industry competitiveness. Taiwan, South
Korea and Japan remain the index leaders when it comes to the R&D environment for
technology production. All are prolific generators of technology patents, and its firms and
governments are heavy R&D spenders.
Globalisation and the Internet will “liberate” R&D. Ecosystems similar to America's Silicon
Valley—bringing together talent, technology, venture capital and good universities, supported
by a risk-taking ethos—will remain the best incubators of IT innovation. Internet-driven
collaboration will partly level the playing field, however, facilitating companies’ access to
skilled IT innovators and researchers wherever they are located.
Competitive broadband markets help cultivate strong IT sectors. Without fast, reliable
and secure Internet access, technology firms cannot interact effectively with partners nor can
they sell their services online. IT industries in the index top tier all derive substantial benefit
from the high-quality networks developed through competition, but more telecoms
liberalisation is needed in less developed regions to spur infrastructure development.
Legal regimes are slowly improving. The US, Australia and west European countries retain
the world’s most effective systems of intellectual property (IP) protection and the most
developed bodies of e-commerce and cyber crime law. But progress in bolstering legal
regimes is also being made in tough places such as China, which in recent years has updated
its IP and e-commerce legislation and improved enforcement.
Governments must let market forces operate. To support the development of local IT
production, policymakers' best efforts are aimed at improving education, skills development,
and the financing and legal environments. E-government development and a proactive
broadband strategy also help, as can calibrated support for innovation. Trouble often comes,
however, when governments try to champion specific companies or technologies.
"Policymakers and business leaders need to address the full combination of factors that enable
competitive IT industries," maintains Denis McCauley, Director, Global Technology Research
with the
Economist Intelligence Unit. "Few countries can hope to build strong IT production sectors
without
strong business and legal environments, deep pools of talent, support for innovation, and the
widespread use of technology throughout society."
The year 2008 index shows that a country’s IT competitiveness rankings can move upward or
downward very quickly,” says Robert Holleyman, president and CEO of BSA (Business Software
Alliance). The ability of information technology to deliver jobs and a better quality of life is
strongly affected by the six drivers of competitiveness. The chart below should serve as a guide
for governments on advancing innovation and economic performance concerning the country IT
industry competitiveness.
Figure 1: IT industry competitiveness index
Figure 2: Overall business environment of top 20 countries by IT investments
It is evidently that The Netherlands places on 11-th place based on the investments in the ICT
industry flowing in the country from foreign and local investors. That places the Netherlands in
the list of the most attractive place for IT investments.
The Netherlands has scored increasing revenues growth for the last three years
(2006,2007,2008) as could be seen from the data chart taken from the Euromonitor statistics
database.
However due to the outraged economic crisis.
For year 2008 the total telecommunication revenues were 18510 millions € .
The revenues increase for year 2008 is 480.4 millions, whether from 2007 to 2006 the yearly
increase has been of 496.5 or in other words 16.1 million more for year 2007 than 2008. Also in
the Netherlands there is a general trend for Computer users growth for year 2008 the computer
users were approximately 9 245 500 thousands and Internet subscribers of 8 940 000. Internet
users in the Netherlands are 15580.4 which means practically almost every person in the
Netherlands is an Internet user in other words most of the people in the Netherlands are early
adopters in terms of technology.
Geographies
Categories
Netherlands - € mn
Total
telecommunications 16286. 16735. 16976. 17534. 18030. 18510.
revenues
8
6
5
4
5
9
Netherlands - '000
Internet users
Netherlands - '000
Personal computers (PCs) in
use
7993.7 8375.2 8679.8 8918.4 9103
9245.5
Netherlands - '000
Internet subscribers
8940
Netherlands - € mn
Capital
investment
telecommunications
Netherlands - '000
ISDN subscribers
Netherlands - %
telephone main lines
2003
8500
5000
2004
2005
2006
2007
14544. 15245. 15580.
10000 12060 4
6
4
7000
7670
8200
8610
in
3312.7 3312.2 3444.6 3360.5 3411.5 3475.1
1525
of Availability of digital main
lines
100
1515
1424
1297
1315.7 1298.9
100
100
100
100
Date Exported (GMT): 02/03/2009 14:16:56
©2009 Euromonitor International
Figure 3: Total Telecommunication revenues
Internet users
Internet users are people with access to the world-wide network.Internet subscribers
Internet Subscribers
The number of Internet subscribers including dial-up, leased lines and broadband.
Dial-up
Number of Dial-up Internet subscribers. Dial-up is a connection to the Internet via a modem and
telephone line, which requires that the modem dial a phone number when Internet access is
needed. Dial-up modem speeds are generally limited to speeds of 28 kbit/s to 56 kbit/s.
Broadband
2008
100
Broadband Internet subscriber refers to someone who pays for high-speed access to the public
Internet (a TCP/IP connection). High-speed access is defined as being equal to, or greater than
256 kbit/s, as the sum of the capacity in both directions. The statistic is measured irrespective of
the type of access, or the type of device used to access the Internet, or the method of
payment.ISDN subscribers
The number of subscribers to the Integrated Services Digital Network (ISDN).
It includes both basic rate and primary rate subscribers.
Availability of digital main lines
Refers to the percentage of main lines connected to digital exchanges. This percentage is obtained
by dividing the number of main lines connected to digital telephone exchanges by the total
number of main lines. This indicator does not measure the percentage of exchanges which are
digital, the percentage of inter-exchange lines which are digital or the percentage of digital
network termination points.
Capital investment in telecommunications
Refers to expenditure associated with acquiring the ownership of telecommunication equipment
infrastructure (including supporting land and buildings and intellectual and non-tangible
property such as computer software). These include expenditure on initial installations and on
additions to existing installations.
Total telecommunications revenues
This is the total telecommunication revenue earned. Revenue (turnover) consists of
telecommunication service earnings during the financial year under review. Revenue should not
include monies received in respect of revenue earned during previous financial years, neither
does it include monies received by way of loans from governments, or external investors, nor
monies received from repayable subscribers contributions or deposits.
Currently in the IT industry world wide basis there a couple of key players operating on the
market.
III.03 Strategic Positioning
(a) Introduction
A few decades ago, computers were fairly rare outside of research and government
institutions.Today, Information Technology (or IT) is an indispensable part of human life.IT has
become the backbone of social and economic activity, enabling everything from business
transactions to interpersonal communication.No IT, no life.
The Netherlands has its own vibrant IT industry.Some 26,000 companies are involved with
various IT-related activities, generating €29 billion or 5.5% of GDP.
This represents a substantial industry, which creates employment for 250,000 people, or 3.5% of
the total workforce.
In addition to its stand-alone activities, IT is a vital enabler of other industries.IT is responsible for
25% of the European Union’s GDP growth and has contributed to a 40% gain in productivity.A
similar effect can be seen in the Netherlands.The Innovation Axis, as it is called, refers to the
ability of IT to enable innovation in other industries as well.The world-class position we enjoy in
industries such as logistics, food technology, maritime construction and the creative sector is in no
small
part
thanks
to
our
IT
expertise.
(b) Vendors Strategic positioning in the Netherlands
Netherlands is the world's fourth-largest exporter of IT services for year 2007 right after the
USA,
United
Kingdom
and
Germany.
If you have ever listened to music, enjoyed wireless Internet or used a wireless headset with
your mobile phone, chances are you have been using technology that was developed by the
Dutch
The Compact Disc, which revolutionised the music industry, was developed in part by
engineers from the Dutch company Philips WI-FI, the global standard for wireless Internet
has also Dutch roots.It was developed in the Dutch town of Nieuwegein, at a subsidiary of NCR
Corporation/AT&T. Only a couple of years before the Dutch engineer Jaap Hartsen developed
the
Bluetooth
technology.
According to a survey conducted by IBM and the Economist, Netherlands rate 6th out of 68
large economies in terms of the quality of our infrastructure. The growth of the IT industry in
the Netherlands is projected to continue steadily up at a healthy rate of 4.5%.
It's expect that Europe in general, and the Netherlands in particular, to continue as leaders in
mobile communications in the years to come.
The below figures taken from the Dutch ICT Office marks key ICT figures (indicators) in the
Dutch ICT (Information and Communications Technologies).
Figure 4: Key ICT figures and the Dutch Economy 2007-2007 & Percentage growth of the ICT
market from 2004 to 2007 in the European Union and the Netherlands
As could be observed in the data in the first Chart (Key ICT figures and the Dutch economy 20012007) the Netherlands has went through growth in Information Technology Usage (ICT growth),
Telecommunication growth for the years from 2003 until 2007.
The year 2007 the growth encountered in ICT usage is 18% less than the previous year, however
the growth trend is still there.
Year 2007 could be distinguished with a rapid leap in the private consumption of ICT whether it
has rised from -0.07% to 2.20%. For the years (2005, 2006,2007) the Gross Corporate
Investments are rising each year where in year 2007 the growth was with 0.72% less than in
year 2006 compared to
the growth noted from year 2005 to 2006. Also the chart shows that the ICT share part of the
GDP is 5.36% from the overall GDP of the Netherlands, this number constitutes relatively high
number of the overall country GDP.
The second chart consists of two parts showing the percentage growth in the ICT market, the
firstpart shows the growth in the European Union whether the second part shows the specific
growth for the Netherlands. The data above is distributed by different general IT industry
segments (Hardware, Software, ICT Services, Office Technology, End-User Equipment,
Telecommunications Services), the last row of it shows the summary results of all the IT
industry segments. It could be seen that the Office technology demand is rising each year from
2005 to 2007 as well as the End-User-Equipment has dramatically risen for year 2007 in
contrast with the decline for the previous 2006 year. The customers demand for Computer
hardware has marked a steady years growth from year 2005 until 2007.
PC shipments in Western Europe totaled 20.1 million units in the fourth quarter of 2008, an
increase of 12.1% from the same period in 2007. In 2008, PC shipments reached 66 million units
in Western Europe, representing 17.2% growth from 2007.
“Surprisingly, in the fourth quarter of 2008 Western Europe was the strongest performing region
in Europe, the Middle East and Africa (EMEA) as both Central Eastern Europe and the Middle East
and Africa were impacted severely by the worsening economic conditions,” says Ranjit Atwal,
principal analyst at Gartner. ”.
Mini-notebooks continued to boost growth reaching nearly 2.5 million units in the fourth quarter
of 2008, with the Telco channel gathering greater importance as a route to market for the PC
vendors.
While growth in PC sales in Western Europe was good, the underlying trend was down, with the
professional market experiencing a 5% decline in the fourth quarter of 2008. If it wasn’t for mininotebooks, the overall Western European market would be showing a decline. This does not bode
well for 2009 as it is expected the general economic conditions to worsen..
The vendors that were active in the consumer market achieved the best results, with all four
major European countries—the UK, France,Germany and the Netherlands —leading the growth.
In the fourth quarter of 2008, ASUS and Toshiba recorded the highest growth as they grew
mainstream notebooks on top of mini-notebook shipments. In the fourth quarter of 2008, price
competition remained fierce with average selling prices falling 15 per cent year-on-year. Vendors
are required to manage risk in the PC business by balancing shipment levels with revenues and
margins, while understanding there is still a significant PC market in 2009 with big opportunities
for the best prepared vendors.
The Netherlands is the fifth largest IT market in Europe and is valued at approximately €16.5bn
per year. It benefits from a central geographical position and it is the base for a large number of
international corporate headquarters. It is also the location for many European distribution hubs
for both vendors and distributors. With an estimated 50% of total IT expenditure concentrated in
the large enterprise market there is a large focus for vendors to sell directly.
Up to 45% of PC shipments are sold directly. For the remaining indirect business there are an
estimated 4,000 - 5,000 resellers supplying the Dutch corporate sector. To survive in this market,
resellers tend to differentiate themselves by focusing on service and solutions.
On the Netherlands market the key computer hardware producers which are taking the largest
market share in the IT hardware market and consequently expected to be a thread for our
company PinPane are: Hewlett Packard, Dell, Acer, Fujitsu-Siemens, Packard Bell and Others. In
the Others category is included many smaller size companies fiercely fighting for tiny fragments
of the overall market.
The chart data below was constructed based on facts from the ITfacts5 online resource, the
information presented is for the last quarter of year 2008.
The data for the period 2007-2008 indicates that HP has been holding the largest market share
with owning 26.90% of the overall computer sales, followed by Dell Inc. accordingly with 19.40%
Dutch market share, then Acer with 11.70%, Fujitsu Siemens is gaining increasing it's market
share to 7.50% whether NEC is gaining 5.80% of the of the whole market pie. Apple sustained its
market share to the number of 7.20% and has realized gains in sales for 2008. Sony's market
share on the Dutch pc-market for 2008 was a positive one and numbered to 7.09%, marking a
minor positive growth in sales with 0.09%.
The year 2008 was also a successful for Toshiba Computers in which the company owned
13.80% of the market.
The rest 0.61% of the market holden by other numerous mostly tiny company and this tiny
company market share has decreased with 0.30% during year 2007.
Dutch PC market by vendors for year 2007-2008
Vendor
Q3 2007
Share, %
Q3 2008
Share, %
Growth in Sales
Hewlett Packard
146324
31.10%
155907
26.90%
6.50%
Dell
98559
21.00%
112540
19.40%
14.20%
Acer
47443
10.10%
68013
11.70%
43.40%
Fujitsu Siemens
20396
4.30%
43301
7.50%
112.30%
5 NEC/Packard
http://www.itfacts.biz/
Bell
20943
4.50%
33415
5.80%
59.60%
Apple
34196
7.20%
41686
7.20%
5.40%
Sony
40595
7.00%
41174
7.09%
4.00%
Toshiba
44654
7.70%
80407
13.80%
72.04%
Others
17337
7.10%
3480
0.61%
0.00%
Total
470447
100.00%
579923
100.00%
23.30%
Figure 5: Dutch PC market vendors market shares change from year 2007 to 2008
Figure 6: Dutch PC Market chart pie
The data chart reveals also that the Total number of Sold Computers (Desktop & Notebooks) in
the Netherlands for the 3-rd quarter of 2008 when 470447 computer hardware items were sold.
As reflected in the “Context SalesWatch Database” its observed that the European Market
demand is orienting mostly towards notebooks and mini notebooks and mobile computing
devices in general.
The graph below taken from their database clearly shows that trend.
For example, during the first week of December, the database reveals that Notebook unit sales
grew 26% compared to the same period year over year. Excluding mini-notebooks, the category
would have declined 4%.
The graphs shows results for year 2008. As could be seen there is 47% increase in demand for
notebooks and mini notebooks in the Netherlands for the first of the year. In the second half the
demand marks a decrease to 16%, possibly to the global economic crisis taking it's toll.
European distributors drove substantial year-over-year growth in the notebooks category in
2008, according to Context SalesWatch reports.In the table below it's outlined the increase in
number of sold notebook computers in the Netherlands, Spain, Germany, UK, France and Italy:
Country
Spain
Netherlands
Germany
UK
France
Italy
2008 Notebooks S ales (Year-Over-Year % Change)
35.20%
22.60%
19.30%
4.20%
4.10%
4.00%
The Netherlands arranges as a second in terms of sold notebook computers growth for year
2008, with sold 22.60% more notebooks than in 2007. That is a good sign for our company
PinPane, considering the fact that our company main profit is from notebook sales.
(c) Conclusion
All the above research shows that in The Netherlands our company had an increasein the IT
market demand. Our company products are mostly concentrating on innovation as our main line
of products is a touch screen display notebooks. In the above research we have clearly showed
that the trend in the Netherlands for the last 3 years as well as the IT market trend for whole
Europe has a tendency of increase in the demand for computer hardware each year.
Therefore there is a great market potential for our products in the Netherlands as well as in the
rest of the the developed economies in Europe. Our company the upcoming 2009 is going to be
one really challenging year for the company taking in consideration the interesting world
economic situation. The complicated economic situation creates a lot of threads but at the same
time opens doors for new business opportunities of our company products. Our innovative
product if properly marketed opens up space for a blue ocean strategy to be applied in our
company products and therefore could lead PinPane to a growth in it's current revenues as well
as to conquering of a bigger market share.
III.04 Competitors
Hewlett-Packard Company
The Hewlett-Packard Company 6, commonly referred to as HP, is a technology corporation
headquartered in Palo Alto, California, United States. HP is the largest technology company in the
world and operates in nearly every country. HP specializes in developing and manufacturing
computing, storage, and networking hardware, software and services. Major product lines
include personal computing devices, enterprise servers, related storage devices, as well as a
diverse range of printers and other imaging products. Others of the HP product lines, include
electronic test equipment and systems, medical electronic equipment and instrumentation for
chemical analysis.
HP markets its products to households, small to medium size businesses and enterprises both
directly, via online distribution, consumer-electronics and office-supply retailers, software
partners and major technology vendors. HP posted US $91.7 billion in annual revenue in 2006 7
compared to US$91.4 billion for IBM, making it the world's largest technology vendor in terms of
sales. In 2007 the revenue was $104 billion 8 making HP the first IT company in history to report
revenues exceeding $100 billion. HP is the largest worldwide seller of personal computers,
surpassing rival Dell, according to market research firms Gartner and IDC reported in January
2008. The leading position of HP strengthened when the gap between HP and Dell when it was
determined that for 2007, HP took near 3.9% market share lead. HP is currently the 5th largest
software company 9 in the world.
6
7
8
9
http://www.hp.com/hpinfo/newsroom/facts.html
http://media.corporate-ir.net/media_files/irol/71/71087/pdf/HP_2006AR.pdf
http://www.cbronline.com/article_news.asp?guid=C4927745-C588-4832-B8A1-92C3B77DDFE0
http://www.softwaretop100.org/list.php?page=1
The company is one of the only companies who participate on the New York Stock Exchange.
The major competitive product to our main product has just recently been introduced by HP that
is the HP TouchSmart tx2-1020us Notebook 10.
Dell Inc.
Dell, Inc. recognized on NASDAQ 11 under the name DELL, HKEX: 4331) is a multinational
technology corporation that develops, manufactures, sells, and supports personal computers
and other computer-related products. Based in Round Rock, Texas, Dell employs more than
82,700 people worldwide 12. Dell grew during the 1980s and 1990s to become (for a time) the
largest seller of PCs and servers. As of 2008 it held the second place in computer-sales within the
ICT industry behind HP. The company currently sells personal computers, servers, data storage
devices, network switches, software, and computer peripherals. Dell also sells HDTVs that are
manufactured by other brands.
In 2006, Fortune magazine ranked Dell as the 25th-largest company in the Fortune 500 list, 8th
on its annual "Top 20" list of the most-admired companies in the United States 13. In 2007 Dell
came down to the place ranked as being a 34th in the Fortune 500 list. On March 1, 2007, the
company issued a preliminary quarterly earnings report which showed gross sales of $14.4
billion, down 5% year-over-year, and net income of $687 million or 33% decrease per share
worth. The company aims at low product price and a high quality products. All the company
financial results are available via the company's corporate website 14
Even though the worsening financial situation at Dell. With the return of the Dell's company
founder Michael Dell as a company CEO in January 2007 the financial results encountered for the
first quarter of 2008 are considered improving 15.
A major competitive product that might be a substitute for our company PinPane's TouchScreen notebooks are Dell's Vostro 16 notebooks (Office/small business desktop and notebook
systems) and Dell's Latitude 17 notebooks (A commercially focused notebooks).
Most of Dell's notebooks came with pre-installed Windows operating system, however Dell is
offering some of its notebooks with Linux as an alternative operating system.
However none of the current company notebook products does not provide the user with a
notebook who have the capability of a TFT touchscreen. A notebook augmented competitive
10
11
http://reviews.cnet.com/laptops/hp-touchsmart-tx2-1020us/4505-3121_7-33488085.html
NASDAQ Stock Market – http://nasdaq.com/
12
13
http://www.sec.gov/Archives/edgar/data/826083/000095013408005718/d55156e10vk.htm
the Fortune 500 list - http://money.cnn.com/magazines/fortune/mostadmired/top20/
14
Dell Fiscal year results http://www.dell.com/content/topics/global.aspx/about_dell/investors/reports/annual?c=us&l=en&s=corp&redirect=1
15
Dell Improving its financial results http://www.guardian.co.uk/technology/blog/2008/may/30/dellsfinancialresultsbeatl
16
Dell Vostro Notebook series - http://www.dell.com/content/products/category.aspx/vostronb?c=us&cs=04&l=en&s=bsd
17
Dell Latitude Notebook series - http://www.dell.com/latitude
product that Dell offers is the Wasabi Ultramobile Photo Printer 18. Dell are actively working
right at the moment on developing a touchscreen capable notebook. Dell works in a close
partnership with Microsoft, Intel and Google.
Acer Incorporated
Acer Inc. is a Taiwanese multinational electronics manufacturer. It owns the largest franchised
computer retail chain in Taipei, Taiwan. Acer is the third largest computer manufacturer in the
world (by sales) after HP and Dell Inc. 19 and its product lineup includes desktops and laptops,
as well as personal digital assistants (PDAs), servers and storage, displays, peripherals, and ebusiness services for business, government, education, and home users. By 2005, Acer employed
7,800 people throughout the world while maintaining a global sales and service network.
Revenues were US$11.31 billion in 2006. Acer's North American market share slipped over the
past few years while the European market share has gone up 20.
In Europe, Acer mounted an association with the Ferrari Formula 1 Team. Prior to this they were
associated with Prost Grand Prix in 2001 and the BAR-Honda team in 2002. Their sponsorship of
Prost was intensive and resulted in buying the naming rights to the engine. Throughout the 2001
season the team were referred to as Prost-Acer. After Prost folded, Acer sponsored the BAR
team. Acer then began to offer a line of premium laptops and LCD monitors with Ferrari
branding. It has recently broadened the scope of its relationship with Ferrari by announcing it
will sponsor the Formula One team until 2008. Acer has recently introduced Ferrari-line of
products in North America as well as a PDA devices under the Ferrari brand. In August 2007
Acer has acquired its US based rival Gateway Inc. for $710 million US dollars 21. In September
2008, Acer surpassed HP and Dell over worldwide notebook shipment becoming No.1 in the
world. Acer have their own Travelmate notebook Tablet PC 22series, this are a competitive to
PinPane's offered Touch-Screen display notebooks on the market.
Acer Inc. acquired Packard Bell in in 2008 23
Fujitsu Siemens Computers
Fujitsu Siemenas Computers has been a 50/50 joint venture between the Japan Fujitsu Limited
and Siemens AG of Germany. On April 1,2009 Fujitsu Limited did a buy out of the Siemens
company shares as a result the company name was changed as well to Fujitsu Technology
Solutions.
18
Dell Wasabi portable printer series
http://accessories.us.dell.com/sna/productdetail.aspx?c=us&cs=19&l=en&redirect=1&s=dhs&sku=224-3591
19
Acer Eclipses Lenovo, takes aim at Dell http://www.itworld.com/Comp/1181/071026acer/
20
21
22
23
http://news.cnet.com/PC-market-surged-in-2005,-will-settle-in-2006/2100-1003_3-6028454.html
Acer buys Gateway - http://www.msnbc.msn.com/id/20458321/
Acer Tablet PC Travelmate notebooks - http://www.acersupport.com/notebook/html/tabletpc.html
http://news.cnet.com/8301-10784_3-9881145-7.html?tag=bl
Fujitsu Siemens Computers offers handhelds, desktops throughout enterprise-class IT
infrastructure solutions and services. Fujitsu Siemens Computers had a presence in key markets
across Europe, the Middle East and Africa (products marketed elsewhere were sold under the
Fujitsu brand), with the services division extending coverage up to 170 countries worldwide.
The company aims and specializes in producing “green” computers always striving to support
high ecological and environmental standards. The company has one major product which could
be a competitive to PinPane's notebooks, that is Fujitso Biblo series 24. The company works in
close relationships with Microsoft and Intel.
Apple
Apple Inc., NASDAQ:AAPL) formerly Apple Computer Inc., is an American multinational
corporation which designs and manufactures consumer electronics and software products. The
company's best-known hardware products include Macintosh computers, the iPod and the
iPhone.
The company operates more than 250 retail stores in nine countries 25 and an online store 26
where hardware and software products are sold. Apple has about 35,000 employees worldwide
27 and had worldwide annual sales of US$32.48 billion in its fiscal year ending September 29,
2008 28
Apple is known to have a large loyal customer base for various reasons like the company
philosophy of comprehensive aesthetic design to the company's distinctive advertising
campaigns 29. Apple's most loyal brand customers are located in the the US even though in many
other countries the company has many passionate apple addicts. From 2005 the company has
entered into a strategic partnership with Intel. As a consequence the entire Mac product line
from January 2006 is using Intel processors.
24
Fujitsu Notebook series - http://uk.ts.fujitsu.com/home/products/notebooks/index.html
25
http://www.apple.com/retail/storelist/
26
Apple Online Store – http://store.apple.com
27
http://seekingalpha.com/article/115797-apple-inc-f1q09-qtr-end-12-27-08-earnings-calltranscript?source=front_page_transcripts&page=-1
28
http://www.apple.com/pr/library/2008/10/21results.html
29
http://www.macnn.com/articles/06/07/11/apple.google.find.loyalty/
Apple sells a variety of computer accessories for Mac computers including the AirPort wireless
networking products, Time Capsule, Cinema Display, Mighty Mouse, the Apple Wireless
Keyboard computer keyboard, and the Apple USB Modem. One of the the company products
which might be counted as competitive product for our touch-screen display notebooks is the
company's famous IPhone. At the existing moment the company does not have completely equal
product to our touch screen notebooks. The company makes no plan to introduce a touch screen
to its product lines 30. The Mac notebooks come with their own operating system Mac OS X, its
easiness to use as well its good sense of design is a major thing which attracts Apple's customers.
However this is also an obstacle since their operating system is sometimes not completely
compatible with the most used Microsoft Windows system software.
Toshiba Corporation
Toshiba or
(TYO: 6502) is a multinational conglomerate manufacturing company,
headquartered in Tokyo, Japan. The company's main business is in Infrastructure, Consumer
Products, and Electronic devices and components.Toshiba-made semiconductors are in the top
20 semiconductor sales leaders 31.
Toshiba is the world's fifth largest personal computer manufacturer right after HP, Dell, Acer
and Lenovo. 35% of the company's overall production and sales are digital products (mobile
communications, consumer electronics, PCs).
Currently Toshiba laptops are produced by Toshiba's Corporation in-house company umbrella
Laptop Computing, the company mobile phones and hand-held devices are produced by
Toshiba's sub-companies known under the umbrella name Digital Products Group including in
itself (Mobile Communications Company, Digital Media Network Company).
One of the most well sold companies products are the Toshiba Satellite's series 32 notebooks. The
Toshiba Satellite's notebooks had been known to be a good balance solution for people looking
for a notebook balancing between a high quality and a cheap price.
The company doesn't have a direct competitive product to the PinPane's TS-1000 notebooks.
Recently Toshiba had introduced the Toshiba TG01 33 a touch-screen phone device. This device
could be a possible product substitute for our company's touch-screen display notebooks.
The company is using the services of Fujitsu for supply of its Hard Disk Drives.
Sony Corporation
30
31
32
33
sna/
Jobs on touchscreen - http://digitaldaily.allthingsd.com/20081014/liveblogging-from-the-apple-notebook-event-2/
http://www.gartner.com/it/page.jsp?id=584210
Toshiba Satellite series - http://explore.toshiba.com/laptops/satellite
Toshiba TG01 - http://www.engadget.com/2009/02/03/toshiba-tg01-with-4-1-inch-wvga-touchscreen-a-worlds-first-
Sony Corporation is a multinational conglomerate corporation headquartered in Minato,
Tokyo, Japan. Sony's revenues are exceeding ¥ 8,871,400 (EUR 66859.6) 34 (trillion as of 2008 .
Sony is one of the leading manufacturers of electronics, video, communications, video game
consoles, and information technology products for the consumer and professional markets. Sony
Corporation
is the electronics business unit and is a parent company of the company conglomerate Sony
Group.
Sony's principal business operations include Sony Electronics, Sony Computer Entertainment,
Sony Music Entertainment, Sony Ericsson and Sony Financial Holdings. Sony is among the in the
top 20 semiconductor sales leader list. Sony has received numerous awards and much
recognition for their environmental efforts throughout the world. Their achievements in the way
of energy and environmental conservation have earned them respect for their green campaign
despite bad press from a low ranking on Greenpeace's greener electronics report. Sony's policies
address their effects on global warming, the environment, and resources. The company has also
developed a biobattery 35 that runs on sugars and carbohydrates that works similarly to the way
living creatures work. This is the most powerful small biobattery to date. The corporation is
producing many computer equipment augmented products which might be considered
competitive products to PinPane's hardware equipment products, possible substitute product
for PinPane's notebooks TS-1000 are the Sony Vaio series 36.
III.04 Industry Trends
The Netherlands is a technologically advanced country with an excellent transportation and
telecommunications infrastructure. The country offers a compact market, which is used by many
IT companies from abroad as a pilot market and as a central point for distribution of products
and services throughout Europe. Netherlands also has the well-deserved reputation as the
"Gateway to Europe". The notebook market is still the fastest growing segment within the
Information Technology sector in the Netherlands, although the overall PC market growth is
1.5% for the year 2008. 84% of companies are already using mobile devices (especially
notebooks) and the market is still growing.
Today higher flexibility and wireless communication are seen as the most important advantages
of notebook usage. Wireless communication with notebooks is already established in 70% of
companies Dutch companies do not consider Green IT and design to be important purchase
criteria’s for notebooks, which will give PinPane good competitive advantage.
The Netherlands ICT market is expected to have a slightly growth for the year 2009 and the ICT
revenues with go up with 2.5%. The total Netherlands IT market – software, hardware and
services amounted to approximately USD 15.2 billion in 2008 and is expected to grow to
approximately USD 15.6 billion in 2009. The total Netherlands market for IT and
Communication Technology (ICT) put together amounts to about five 5% of the total European
34
http://www.sony.net/SonyInfo/CorporateInfo/
35
http://www.techgadgets.in/misc-gadgets/2007/24/sony-develops-worlds-most-powerful-sugar-based-bio-batteryprototype/
36
http://vaio.sony.co.uk/
ICT market and is the sixth largest in Europe. The computer software market estimated at about
USD 6.7 billion in 2008 and is still the fastest growing segment within the Information
Technology sector.
III.05 Five Competitive Forces
(a) Threat of new entrants
According to the research carried out, the threat of new entrants on the Dutch IT market is
relatively high due to the increased demand of the customers. The country itself provides a very
favorable business environment for the development of international companies. The tax laws
in the Netherlands allow a more easy entrance of foreign companies in a number of industries
including the IT one.
(b) Bargaining power of suppliers
The threat of bargaining power of suppliers for PinPane is low. The company decided to open a
subsidiary in the Netherlands; all products will be produced at the existing factory in Dortmund.
Therefore the company does not need to find new suppliers in the Netherlands. PinPane has
long-term relationships with its current suppliers and thus, there is no threat of bargaining
power of suppliers for our company.
(c) Threat of substitute products
The threat of substitute products is low. Nowadays everything is based on IT-technologies and
the only substitute for our main product (notebook with touch screen) is PC. But PC is not
portable and that is why it can hardly substitute notebook, which is portable and much smaller
than PC. So PinPane should not be afraid of substitute products.
(d) Bargaining power of buyers
The bargaining power of buyers at Dutch market of IT-technologies is not so high. Notebooks
and hardware products are irreplaceable nowadays and there are a lot of companies producing
similar products so buyers can hardly influence on prices.
(e) Competitive rivalry
Competitive intensity on the market of Dutch IT-technologies is extremely high. The Netherlands
is technology advanced country and that is why you can find all existing IT products from all
biggest producers in the world. The main rival for PinPane is HP, which produces very similar
notebooks to PinPane’s. Speaking about hardware products, competitive rivalry is also
extremely high, because there are a lot of companies with old history which produce the same
products.
III.06 Target Groups
PinPane aims not just at people who use notebooks and hardware for them actively, but at those
who are also keen on innovations in IT industry. That is why all potential customers of PinPane
at the Dutch market can be divided into two target groups:
Target group 1-Students
 Age: 18-23
 Occupation: Students and Young Professionals
 Sex: Male, Female
 Income: from low to middle income
Target group 2-Adult computer users




Age: 30-45
Occupation: Office workers, entrepreneurs
Sex: Male, Female
Income: from middle to high income
We believe that the best division of potential market can be into this to groups. The main criteria
by which we selected target group is an interest in IT-technologies. These people are active
users of Internet, they use additional hardware for their notebooks and PC and they are looking
for the recent innovations in IT sphere.
So the first target group consists of students who are in age of 18-23 and have low or middle
income. This group consist of approximately 350, 000 people37. Most people within this group
show active interest in IT-technologies and they can create demand for our products.
The second target group is called Adult computer users. It consists of people who already
finished their education and work as office employees or have their own business. They also
show active interest in recent IT developments and have middle or high income. The estimated
amount of people in this target group is 4 mln.
III.07 Driving Forces
Industry growth rate
In the fourth quarter of 2008, the worldwide PC industry suffered its worst growth rate since
2002, as worldwide shipments totaled 78.1 million units, a 1.1 percent increase from the fourth
quarter of 2007, according to preliminary results from Gartner, Inc. The growth driver for the
2008 holiday PC season was the mini-notebook segment. With more vendors offering creative
sales promotions, the mini-notebook segment outpaced overall mobile PC growth. However, PC
revenue experienced a record decline. Steep average selling price (ASP) declines, as well as
robust growth of low-priced systems, including mini-notebooks, contributed to this drop.
In the Netherlands, where the overall PC market recorded a small growth rate of 1.5%, Acer
performed excellently reaching the second ranking on the PC market with a 24.5% growth rate
37
http://www.gse.buffalo.edu/org/inthigheredfinance/region_Europe_Netherlands_updated.pdf
and a 20.5% market share. As for the notebook market Acer jumped to the first position
achieving a 28.8% market share.
Innovations
The company is coming on the market with a new way of understanding between people and
computers. The main advantages of the touch-screen notebook will be that there is not going to
be a need of a touch pad and the notebook will weigh less, more compact and will be able to
compete with the mini-notebooks segment which is outpacing the overall PC growth. Also a
bigger battery will be used in order to be increased the battery life from 7 to 8 hours without
charging. For the people who don’t want to have finger spots on their screens, will be able to
buy touch-gloves.
Technological change
For Pin Pane, change is essential to its strategy as it seeks to augment market share and
modernize its services and operations by providing to the customer more user friendly products.
In nowadays, people want to feel more comfortable doing their work and the technology is one
of the aspects that will satisfy this need. Pin pane believes that by putting their products in the
market will lead to a new change in the people and technological world like iPhone did. The
products (touch-screen notebook, USB slippers, touch- gloves and etc.) that the company invents
are connected with each other. Basically, the more you buy the higher the satisfaction and
comfort you get.
Entry of a new competitor
Samsung comes into the market with five notebooks and one netbook that it believes will allow
it access to the business and consumer segments. Each notebook will use Intel Centrino 2
processor technology with Intel Core 2 Duo processors, 3 GBytes of system RAM, 802.11
a/b/g/n WiFi, USB 2.0 ports, Gigabit LAN, Bluetooth 2.0, and HDMI output. The company
reminded that more than 80 percent of the core components that go into its notebooks are
Samsung branded. The South Korea-based electronics giant leads its home PC market and, until
today, only had presence in 12 additional markets: the UK, France, Germany, Italy, Spain, Poland,
Netherlands, Russia, Ukraine, China, Hong Kong, and Turkey.
Cost and efficiency
The company plans are to become greener. This means Pin Pane is trying to remove the toxic
chemicals from their new products and to recycle their old products. Furthermore the company
is excellent in innovation and engineering, and it is applying these same talents to become an
environmental leader. To satisfy the customer needs, the company supplies an efficient service,
as well as dedicating the time and effort to continually making environmentally friendlier
products. Working with multiple types of real estate and management venues, Pin Pane
Investments utilizes new innovations and technology to secure the most cost efficient yet
effective methods to sustain continued consistent growth. Using long term strategies and
"outside the box" type of thinking, Pin Pane Investments ensures high quality decision making
initiatives and communicates clear goals to not only clients and investors but also to all
members of the Pin pane Investment team.
III.08 Critical Success Factors
The technology is constantly changing and the companies are trying to develop better and better
products for satisfying their customers. In the IT market one of the most important factors is the
innovative part. During the upcoming years PinPane will invest 10% of its revenues for
Research and Development to maintain and improve the current products and invent new
products to increase the competitive advantage and market share.
Another critical success factor for PinPane is Employee alignment. It is important that all
employees are strategic focused and work towards the company goals. Until 2011 PinPane
employees will reach 70% awareness of the company goals, mission and vision.
Employee training is also one of the success factors for PinPane. During the next year the
company will spent 3% of the revenues for improving employee performance and to advance
the quality of customer services.
Costs decrease is critical success factor in the logistic strategy of the company. PinPane aims to
decrease logistics costs by 7% by year 2011.
From financial perspective, sales growth is a critical success factor from revenue growth
strategy. PinPane expects to monitor positive dynamics in this factor. The company expects 15%
growth in this indicator.
From the customer perspective, one of critical success factors is customer awareness. This factor
is extremely important for the products placed into the market. The Company expects increase
in customer awareness by 40% by the end of 2009.
Communication is main key to maximizing productivity within any organization. When
communication fails, productivity falls.
Chapter IV• Internal Analysis
IV.01 SWOT Analysis
Strengths
Weaknesses
S1: Quality of services
W1: Weak customer awareness
S2: Innovative approach
W2: Higher price for notebooks
S3: Market share
W3: Lack of distribution network
S4: Financial performance
S5: Proximity to Dortmund
S6: Product diversification
Opportunities
Threats
O1: New customers
T1: Strong competition
O2: Alliances with retailers
T2: World crisis
(a) Strengths
Quality of services
PinPane provides its customers with IT products of extremely high quality. According to the
questionnaire, only 1% of customers experienced technical problems with PinPane products during
the first 2 years after purchase.
Innovative approach
One of the main strengths of PinPane Company is great ability to innovate. PinPane provides its
customers with all recent innovations in IT industry and its own developments.
Market share
PinPane has stable position on both markets, where it operates now. The market shares of our
company in Germany and Switzerland are 18% and 12% respectively.
Financial performance
PinPane has good financial performance and company’s profits are growing each year.
Proximity to Dortmund
As the company has selected the Netherlands as a country for expansion, one of the main
advantages for PinPane is proximity of the Netherlands to company’s production centre in Dortmund
and it will sufficiently cut costs of logistics.
Product diversification
PinPane offers to its customer’s diversified range of products. It includes the most profitable and
most frequently purchased IT goods, such as notebooks, portable hard drives, USB sticks, etc.
(b) Weaknesses
Weak customer awareness
Although the IT market seems more global than consisting of several local ones, nevertheless
PinPane has weak customer awareness on Dutch IT market because its goods are sold only in
Germany and Switzerland.
Higher price for notebooks
PinPane provides its customers with notebooks with touch screen option, which involves more costs
in production and as a result higher price for notebooks, compared with similar ones of PinPane’s
competitors.
Lack of distribution network
The Dutch IT market is a completely new for PinPane and the company has nowadays no established
distribution and logistics network on that market.
(c)
Opportunities
New customers
As PinPane enters a new market, on which company has no market share today, it will attract new
customers, increasing by that overall company’s sales.
Alliances with retailers
As opening own shops and selling there only PinPane’s goods is not profitable for the company, it has
a great opportunity of creating alliances with retailers in the Netherlands and distributing company’s
production through them.
(d)
Threats
Strong competition
PinPane enters an extremely competitive Dutch IT market, where presented all producers of IT goods
worldwide.
World crisis
World crisis is going on nowadays and all customers are cutting their expenses. The threat for
PinPane is that consumers may prefer cheaper and simpler notebooks to highly technological and
therefore little more expensive notebooks of PinPane Company.
IV.02 7S Model
(a) Strategies
The main strategy of PinPane is to be international class company, which change the industry
standards by bringing innovations on the markets it serves. The company supports its main strategy
by developing a number of tactics and short term oriented goals that are aligned to the ultimate goal,
the company is striving to achieve. These are:
 To enter these European markets that allow influencing the IT development and achieve high
market share;
 The company is committed to provide the best quality of services throughout its value chain,
including telecommunications hosting, access to products and customer services;
 To reach the level of production and economic indicators of the European leaders on the IT
market;
These goals are set in order to increase the market share on the home market and on the Swizz
market, where the company operates at the moment; to strengthen the image of the company and
satisfying the customers by building a network which main principles focus on the most profitable
segments of the market.
(b) Structure
There are three types of organizational structure. PinPane is built on the basis of matrix structure. It
is a combination between divisional structure and functional structure. It allows to use the strengths
of both the structures, despite the dual authority. However, the organizational structure is very
useful to international companies such as PinPane.
In the matrix organization, each manager reports directly to the general manager or board of
management. However, each manager who reports has his authority and power when it comes to
the projects to be implemented.
The basis for the matrix organization is to create synergism through shared responsibility between
project and functional management.
 Management:
The management board consists of 22 officers and directors. The chairman since
2004 is Andreas Lahm. The other members are directors of Strategic Program
Realization, Finance and Planning, Deputy General Directors, Industrial Design,
Product Worldwide Marketing, est.
(c) Systems
PinPane has developed several systems that sustain and improve when necessary both quality of
products and services as well as sustaining high level of technological development.
The quality system set up by PinPane meets the standards of the international quality system ISO
9001:2000. The company system is called MSC “PinPane” and it is a system directed to perfecting
the overall performance of the organization. So far the system was introduced to 79% of the
company’s personnel through training programs. The other 21% of the staff will be introduced and
trained during the coming 5 weeks due to the number of the overall personnel in both headquarters
and subsidiary.
 The “Customer under cover” method
Its purpose is to estimates the degree of the customers’ satisfaction by using various
market researches, customer’ inquiries, analysis of messages, etc.
 Open Line
It encourages the analysis of the feedback received from the customers and based on
which strategies are aligned concerning customer satisfaction.
 ISO/IEC 12207 (International Standard for Software Life Cycle Processes
It is a uniform framework that is used to manage and engineer software. PinPane has
adapted to this international standard in order to keep up to date the technological
improvement and further development of its supporting computer systems.
 ICAP (International Conformity Assessment Program)
Provides support by enhancing the implementation and end user value.
(d) Shared Values
PinPane has developed values and principles as socially responsible company. These are:
 Concerning the ethical code of the company’s personnel the core values are:
- Reliability
- Creativity
- Continuous improvement
- Teamwork
- Shared responsibility
Pinpane has also build its principles based on which it could be defined who is PinPane and how does
it work. These are:
 Customer service
 Accuracy and truth-seeking
 Trustworthiness and integrity
Commitment to Corporate Citizenship
PInPane is committed to being a socially responsible and active corporate citizen, working on
improving its business, while contributing to the betterment of the local communities, the
environment and the society overall. The company practices corporate citizenship in several ways:
 Product Quality and Safety: the company is focused on the safety of its products throughout
their entire lifecycle from manufacturing to disposal.
 Safe and Healthy Workplaces
 High Ethical Standards
 Concern for the Environment
IV.04 Value Chain Analysis
(a) Firm infrastructure
The supply chain of PinPane is becoming more complex with its goal to further expansion. It is harder
to manage and more costly to run. PinPane has spent almost 15 million dollars since its foundation in
developing and improving its supply chain. At the moment the company is creating a supply chain
management business transformation outsourcing practice. This would help the company to improve
costs and customer service, while decreasing overall supply chain inventory. Furthermore, PinPane is
about to introduce a visualization of the end-to-end processes across business and IT systems by
analyzing execution in real time against goals and make adjustments as needed. For these purposes,
the company will offer services and middleware to simulate and monitor the processes and will also
provide its customers with real time analysis of the IT systems that are carrying out these processes.
Organizational Structure
- Sales and Distribution Group
- European Business Services Group
- Technology Services Group
- Software Group
- Systems and Technology Group
- Integrated Operations Group
- Innovation and Technology Group
(b) Human Resources Management
In order to eliminate redundancies and overhead structures to drive productivity, the integration
of HRM improves the company’s capacity by providing more clarity around shared goals and
objectives and by this leads to a sharper focus for the company on learning, development and
knowledge sharing.
(c) Technology Development
The company invests crucial amount of money in research and development each year. These
costs include also capitalized software costs, focusing in investments in high-growth
opportunities. Thsese investments allowed the company to introduce new products that gain
relatively high market share soon after their release and the affect of these investments also
influenced positively the image of the company as a new generation developer and constantly
evolving supplier.
(d) Inbound and Outbound Logistics and Operations
PinPane’s supply, manufacturing and logistics and customer fulfillment operations areintegrated
in one operating unit which main purpose is reducing inventories, improving response to
marketplace opportunities and external risks and converting fixed to variable costs. The company
was forced to adapt its operations and logistics due to the high competition on the market it
serves.
(e) Services
The company provides technology and transformation services to customers, and invests to
improve the ability to help their customers innovate. This is considered to be high value added
and profitable process. The service PinPane provides besides the above mentioned are
Middleware services, Outsourcing Services, Security and Privacy Services, Server Services.
(f) Value System Analysis
The value System of PinPane is as follows:
-
The processor and the software providers have higher profit pool than other
suppliers. Furthermore for the distributors, the retailers have the high profit
pool. Therefore, the profit space of server products for the company is not wide
enough.
-
Channels Value Drivers
Wholesalers: Price, choice, quality, logistics;
Retailers: Price, service, guarantee;
Business Orders: Price, service, guarantee
Value Drivers
The information above shows the main value drivers of the company’s distributors. Because of
relatively high buyer power at the moment, satisfying the distributors is required for PinPane.
IV.04 Quality of Services and Products
A survey conducted by PCWORLD 38 magazine among over 60 000 readers in December 2007 39
revealed that Apple and Lenovo are rated with a rank of better than avarage according to the
customers “overall satisfaction with reliability”. The survey reliability measures included whether
there were problems with the laptop right out of the box or if some notebook failed component
caused glitches later on.
According to Consumer Reports 40 in June 2008 issue based on a result of 75 576 responses it was
revealed that Lenovo are the notebooks that had the fewest repairs on avarage. About 20 percent of
Lenovo notebooks required one or more repairs or had significant problems.
38
39
40
http://www.pcworld.com/
PCWORLD survey on notebook customer satisfaction - http://www.pcworld.com/article/id,139958/article.html
Http://consumerreports.com
Apple and Lenovo both topped PC World's reliability and service chart 41, based on reader input.
Lenovo was the only laptop maker to rate above average in all four PC World service categories:
Phone Hold Time, Average Phone Service Rating, Problem Was Never Resolved, and Service
Experience. (We received too few responses to give Apple a grade in the Phone Hold Time and
Average Phone Service Rating categories.
A Consumer Reports tech support survey, based on results from users of 4506 laptops and also
published in its June 2008 issue, puts Apple in first place with a reader score of 83 (100 is the top
score). Lenovo was in second place, but with a substantially lower score of 66, followed by Dell (60).
Hewlett-Packard landed at the bottom with a score of 48.
As could be seen from the above survey revealed that the industry leading notebook brands in terms
of quality according to customers feedback are Apple and Lenovo. Therefore we at PinPane should
focus and well understand what makes Apple and Lenovo satisfy the customer best in terms of
quality of their product. The above survey reveals that most important to the regular everyday
notebook user is the reliability of the product. People want to have a ready to use solutions working
with as little end company support as possible or in cases if support is required the user wants to
have fast and all around the clock support for the bought product.
What makes Apple's and Lenovo notebooks to be a preferred quality solution?
41
http://www.pcworld.com/zoom?id=139958&page=10&zoomIdx=1
Apple products quality
The reason that positions Apple on the top place in the list is on the first place is the company
flexibility, its ability to well maneuver in the rapidly changing IT world. Another thing that makes
Apple's products and in particular their notebooks successful is the shiny image of the company, its
ability to deliver products that are more attracting than the products of its competitors. Apple is well
known for its ability to change the general direction of the IT industry.
Throughout the years Apple has succeeded in popularizing innovations like the graphical user
interface, the mouse, multithread hardware and last but not the least an edgy industrial design of
both its notebooks hardware, software and software and hardware's design. On top of that the
company has succeeded in building a shiny brand name which attracts more and more people
everyday.
Another reason for people valuing Apple's MacBooks as a high quality product are the many Apple
supportive fans around the world, this people do value Apple's big contribution technology and have
a wonderful experience with Apple's products and thus spread the word about their happiness of
owning Apple equipment or gadgets. Therefore in that way Apple benefits a lot of the word of mouth
advertisement and a positive brand image in its customer minds. A lot of people rank Apple's
Macbook and Iphone as a high quality products because of the devices software. Apple's Macbooks
comes pre-bundled with its Mac OS X. The Mac OS X operating system is famous for its reliability
virus proof, e.g. the computer viruses that could affect Apple's operating system are close to zero.
Apple's notebook operating system is also famous for its software stability ranked by many
consumers as a way better than its alternative laptop operating system Windows.
Lenovo products quality
One of the most important reasons which makes Lenovo's products and in particular notebooks so
successful is the company buy-out of IBM's notebook production line in December 2004 42.
One of the most successful Lenovo products is the Lenovo Thinkpad series, this notebooks are direct
descendants of the world famous IBM Thinkpad Series 43. Historically being an inheritors of IBM the
company inherits and implements many of the IBM's high quality tests in its production line. The
company is also committed to provide the end consumer with environmental friendly products.
Another reason why people value Lenovo's notebooks as a high quality notebook is because
Lenovo laptops had the fewest repairs on average per year. According to PCWorld's magazine
research only 5% of all the sold Lenovo's notebooks are causing hardware or sofware failures the
42
43
http://www.consumeraffairs.com/news04/ibm.html
http://www.pc.ibm.com/europe/thinkpad/
report also states that even a lot of the sold equipment returned back as a failed and said to be
problematic is caused by a wrong end user interference and not a hardware or a software system
failure.
Another major reason for users choosing Lenovo's notebooks for their daily work and business
activities is the wonderful Thinkvantage Technology 44 embedded into every Lenovo's notebook.
This technology makes system's maintaince creating system rescue and recovery, system
migration, system security, wireless connectivity and system updates a piece of cake it also includes
a a special hard disk protection system which ensures notebook's stored data with a higher level of
data reliability.
(a) PinPane's products quality
We at PinPane are making utmost effort to ensure rigorous quality control in accordance with the
PinPane Group Quality Control Policy and from the customer's viewpoint in order to fulfil our mission
- to supply the market we serve with outstanding quality of products. Accordingly, we aim to
eliminate product safety incidents and achieve superior quality that delivers No. 1 customer
satisfaction, by increasing our sensitivity to potential risks and dealing with them more swiftly.
PinPane Group Quality Control Policy
1. We engage in quality assurance from the customers' point of view.
2. We observe relevant laws and contracts and respect the rights of customers and third parties.
3. We maintain quality systems aimed at achieving 100% quality.
4. We ensure that all of our departments and all of our employees act on this Quality Control
Policy.
5. We aim for essential improvement by investigating the root causes of process failures.
(b) PinPane Employee Quality Structure and Procedures in Response to Defects and Product
Recalls
An employee who becomes aware of information concerning a product safety is required to alert the
relevant internal departments in charge of dealing with safety issues concerning the product in
question. Then its up to the Quality committee (chaired by a senior executive) to take a decision
what is the best way to act upon the emerged quality related situation. In case of a serious incident
attributable to a product that is likely to recur, we inform our users of the danger and entreat them
to cease using the product in question, report to the competent authorities without delay and
urgently our company establishes countermeasures to resolve the problems with the future
44
http://www.pc.ibm.com/us/think/thinkvantagetech.html
produced problematic products as soon as possible. To promptly collect information on product
safety incidents, we have developed an information system enabling the swift communication to
quality assurance departments and executive management of product safety, in that incident
information system is stored the maintenance and service information about quality incidents that
PinPane's personnel have obtained as well as status information about the appeared product quality
problem or malfunction.
(c) PinPane's Structure for Responces to Product Safety Incidents
(d) Quality Control Checks and Audits
Chief Quality Executives guide and audit factories, suppliers, maintenance and service providers, and
manufacturing outsourcees worldwide to enhance quality throughout product life cycles from
development and production through to final disposal.
ISO9001:2000 Certification (Employee ratio)
PinPane have put in place
management systems for
obtaining certification for
the ISO 9000 family of
standards
for
quality
management
systems.
Currently the majority of the
personal 79% have went through the ISO9001:2000 training program, 21% of the employees still
need to follow the training course.
Percentage of Certified PinPane Employees as of January 6th 2009
(e) Education on Quality Control
In order to maintain and enhance quality, it is vital to ensure employees adhere to work rules, while
raising their awareness of the importance of quality and product safety. For that purpose, we provide
thorough education and training to employees at various stages of their careers, ranging from new
employees to veterans.
Disclosure of Information on Problems with Quality
In occasions that incidents related to the quality occur, information is disclosed on PinPane's website
in order to notify our customers as quickly as possible.
Securing Cooperation from Suppliers to Ensure Quality
Suppliers of PinPane company are indispensable business partners and ensuring the quality of
procurement of components is constantly increasing its importance. In order to ensure the quality of
procurement of product components, we distribute at PinPane distribute Quality Assurance
Guidelines for Suppliers summarizing PinPane's quality assurance policy and supplier expectations.
Based on cooperation among procurement, quality assurance and engineering operations, PinPane
audits suppliers at appropriate intervals in view of the types and importance of provided hardware
components in order to ensure quality of the procured items.
(e) Environmental friendly quality products
PinPane's notebooks TS-1000 reflects engineering and design principles that emphasize resourcesaving, improved easy of disassembly and reduction of use of toxic chemical substances.
PinPane has designed and is now manufacturing one of the world's first fully RoHS 45-compatible PCS.
Our company's implementation of the new RoHS regulations well ahead of the compliance deadline
reinforces PinPane's commitment to product design leadership and our ongoing commitment to the
environment. We also undertakes many R&D initiatives to bring leading edge and environmentally
friendly notebook computers. We have planned that all future PinPane products will be RoHS
compatible. The company products fully compatibility with the European RoHs directive develops
further the quality of the product considering the fact that more and more customers are conscious
if the products they buy are environmental, green friendly. In order to satisfy the increasing demand
of energy improvements in respect of the growing demand of green friendly products as a part of the
product quality, we at PinPane are currently having the Green compliant products product line
Currently according to the greenpeace report 46 Lenovo holds the lead in the notebook IT industry
considering the company's latest cutting edge recycling and toxic content policies.
45
Restriction of Hazardous Substances - http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:037:0019:0023:EN:PDF
46
http://www.greenpeace.org/international/news/chinese-company-tops-greenpeac
In PinPane we had just recently introduced new production facilities in our production lines which
significantly improve the previously company policy in which the environmental friendliness of the
product was not considered to be so important.
We at PinPane do recognize our planet as irreplaceable asset, and we believe it is the duty of
humankind to hand it over to future generations as we found it or if possible even improve its
current environment atmosphere. In relation to that PinPane offers solid environmental
management practices across its products and the company internal processes. Thus we are focused
on prevention of global warming, control of chemical waste level, and efficient utilization of our
company's resources. We at PinPane are confident that commitment to production of environmental
friendly products is something that will ensure the continuous customer satisfaction and minimal
negative environmental impact.
IV.05 Benchmarking
Group
Capacity of
Innovation
Financial
resource
Rank internal
sustainability
4
Customer
service
capabilities
3
Acer
3
Dell
2
3
HP
4
Apple
PinPane
4
3








Quality
service
Performance
3
Technological
skills
Rank
Overall
3
Relative
cost
position
3
4
3
weighted
overall
strength
26
3
2
3
4
4
3
24
3
3
2
3
3
4
3
25
3
2
4
2
3
2
3
2
3
2
4
3
3
2
27
18
Capacity of innovation: The modernization and invention of products.
Financial resource: Places where the company can retrieve money.
Customer service capabilities: Functionalities that a customer service can perform.
Ranking internal sustainability: Identify & measure criteria for internal resources.
Relative cost position: The position where the market price is greater than the cost in the value chain .
Quality service Performance: A degree or grade where the overall service is acceptable during the process in the value chain.
Technological skills: Based on abilities of company scientific and industrial process.
Ranking overall: Having higher position in relation to others.
Ranking table from 1 to 5
This table explains the comparison in several criteria’s of how each company has been performing.
IV.06 Cost Competitiveness
An IT industry is a highly technological industry, and therefore there involved a lot of costs. All costs
for PinPane can be divided into 4 big categories. They are the following:




Software costs
Hardware costs
Personnel and equipment costs
R&D costs
(a) Software costs
Software costs are costs that include operational systems on notebooks and installed programs in
advance. These costs are connected with only product of PinPane- touch screen notebook. Microsoft
Windows is the most popular operational system nowadays, accounting approximately 88 per cent of
market share (Mac OS X- 10%, Linux-1%, others-less than 1%)47. Due to the fact that Microsoft
stopped selling Windows XP, PinPane decided to sigh an agreement with Microsoft Corporation to
install Windows Vista on our notebooks now and Windows 7, when Bill Gate’s corporation will issue
final public version of it.
Linux is an operational system, which is issued on a free basis and that is why expenses involved in
installing of Linux on PinPane’s touch screen notebooks are not so high.
Comparing overall software costs of PinPane and its competitors, we can conclude that it is the
same, because the companies are buying only one corporate license for installing particular
operational system on the production of the company.
(b) Hardware costs
This component includes costs connected with tangible materials that are used in production. As the
management of PinPane decided to produce goods that will be sold in the Netherland at an existing
plant in Dortmund, there are no extra costs connected with reallocation of production. PinPane has
established relationships with its local German suppliers who are able to quickly response to
increasing demand on final goods of PinPane due to expansion to the Netherlands and as a result
new customers attracted.
Comparing overall hardware costs per unit of PinPane and its competitors, we can say that big rival
companies win in this component due to the volume of their production, which is much higher than
PinPane’s, because with each additional unit of production marginal cost decreases and company
comes closer to the economy of scale.
(c) Personnel and equipment costs
47
http://www.tuaw.com/2009/01/02/apple-market-share-tops-10-windows-share-lowest-since-tracking/
This category of costs include in itself money spent on personnel (wages and training) and
equipment. In this component the major role also plays the volume of production. Comparing overall
personnel and equipment costs of PinPane and its competitors we can conclude that PinPane’s costs
are less than rivals’, because less people employed and less equipment used in production.
Nevertheless, calculating personnel and machinery costs per unit of manufactured product, big
companies win in this component once again due to the volume of production.
(d) Research and development department
As PinPane aims at customers who are highly interested in high technologies and recent innovations
in IT sector, a lot of costs are involved in research and development. Comparing R&D costs, PinPane’s
costs are on the level of its competitors.
(e) Conclusion
Summing up and comparing all the costs involved in production of final good of IT sector companies,
we can conclude that PinPane’s competitors spend more money on manufacturing all in all. But if we
compare costs that are involved in production of 1 unit of final output, big rival corporations win in it
due to the amount of goods produced. This difference in cost per unit of output is one of the main
factors of higher price of PinPane’s goods. The company will decrease it by entering a new market
and increasing volume of its production by it.
IV.07 Scope of Sales
Profit and Loss Statement
2nd hafl 2008
2nd half 2007
Revenues
22,543,123
18,237,345
4,305,778
Operating cost
22,343,024
17,943,209
4,399,815
Operating profit
Net Profit
Change
200,099
294,136
94,037
84,041
161,774
69,583
The 20% revenue growth in 2nd half of 2008 was counterbalance by the 42.1% rise in costs and a high
tax rate of 42%. Pinpane benefited from solid growth in 2nd half of 2008, with customer turnover
rising by 15.2%, and the company has yet to see any marked deceleration in 1st half of 2009. In
addition, pricing increases implemented during the summer season are expected to continue into
autumn. This leads us to believe that the company is on track to achieve revenue growth of 22% or
more in 2009.
By looking at the information given to us for 2nd half of 2008 and 2nd half of 2007 we can see that the
company is making about 30% less operating and 39% less net profit than in year 2007. The main
reasons for that is the Economic crisis, the new competitor who is entering the market, Samsung, and
because of PinPane new strategies to augment market share and modernize its products and
services. Until now the company invested about 2.5 millions in research and development. This is a
company that is taking innovation very acutely and it is looking for higher profit in long-term period.
As it is shown in the figure above, we can see that the company is making 70% of its revenues by
selling laptops, 20% by Hardware gadgets, and 10% by other earnings. The largest growth of laptop
numbers — by 30.4% — was in Germany. Growth on places inside Switzerland was 28.6% and 12%
are worldwide. PinPane provide sales representatives to the markets in Germany, Switzerland and
the Netherlands, the rest of world can buy it via internet.